New Tenant Health Index from Re-Leased reveals that New Zealand’s commercial property sector has returned to robust rent collection levels, marking a full recovery from the pandemic-induced low of 64% in April 2020.
The THI reveals that New Zealand’s commercial property sector has stabilised with robust rent collection, tenant retention, and rental income growth, achieving an impressive 99% average rent collection rate within 30 days.
Using data from over 40,000 leases, the THI provides insights into the health of New Zealand’s Industrial, Hospitality & Leisure, Office, and Retail sectors.
Occupier retention rates across sectors averaged 80%, with Hospitality & Leisure reaching the highest tenant retention at 83.3%, underscoring sector resilience. Rent retention, measuring the rent paid by retained tenants year-over-year, averaged 88% across all sectors, with positive growth in rental income for landlords.
"The commercial property sector signals a return to cash flow stability," says Tom Wallace, CEO of Re-Leased. "Industrial properties lead in demand, with strong rent collection and tenant retention rates. Office spaces also show stability as businesses prioritise prime locations to support hybrid work models. While the retail sector adapts to online shopping trends, rent retention in key areas remains encouraging, though incentives are sometimes required in non-prime locations. Hospitality & Leisure holds steady in both collection and tenant retention, reflecting a positive trajectory for New Zealand’s commercial real estate."
Retail presents a complex picture, leading the rent collection recovery with a rate of 98.63% — a significant rise from 48% in 2020. However, it also has the lowest tenant retention rate at 73%, alongside an 85% rent retention rate. This indicates that remaining tenants are paying more, with a notable lease-to-rent variance of 12.2%, likely due to rent increases, larger spaces, or investments in premium locations. This trend highlights a segmentation within retail: prime tenants are absorbing rising rents, while many traditional retailers face growing challenges.
The Industrial sector remains strong with a 99% rent collection rate and an 83% tenant retention rate. Industrial leads in rent retention at 95%, indicating that landlords can charge premium rents for highly sought-after warehouse and logistics space in Auckland, Wellington and Christchurch. The demand remains strong, with minimal turnover.
The adoption of hybrid work models continues to shape leasing trends in New Zealand’s commercial property market, with businesses increasingly committed to securing high-quality, premium office spaces despite the shift towards smaller footprints. Tenant retention in the office sector currently stands at 79%, with companies committing to prime and A-grade locations in key cities. Supported by landlord incentives, these leases often come with longer terms, reflecting businesses’ dedication to maintaining dedicated spaces that cater to employees working both remotely and on-site.
This transition toward modern, flexible workspaces reflects a stabilising trend in office rent retention, with occupiers willing to pay slightly higher rents — up by +7% — to secure premium locations. As businesses refine their space requirements in a post-pandemic world, the commitment to long-term leases is driven by the need to attract and retain talent in prime work environments. Landlords are also actively supporting this shift, offering incentives that foster tenant loyalty and retention.
About the Index
The Tenant Health Index analyses three main metrics: rent collection, tenant retention, and rent retention it provides a detailed view of tenant dynamics. High rent collection rates indicate reliable cash flow. Strong tenant retention (the percentage of tenants remaining after 12 months) reflects long-term stability. Robust rent retention shows the preservation and growth of rental income. The TMI also looks at the retention variance, the difference between rent retention and lease retention. A positive variance indicates that retained tenants are paying more and landlords are seeing rental growth. A negative variance would suggest retained tenants are paying less and rental incomes are declining.
The Re-Leased platform captures live rental collection data directly from over 40,000 unique leases from across the country. The report looks at the New Zealand picture and also provides segmented analysis across major property asset classes (Office, Industrial, Retail and Hospitality).
This report does not rely on surveys or secondary collections, and the data has been collected, anonymised and aggregated in line with the Re-Leased Terms and Conditions as at the time of publishing.
